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Designing Heaven's Will: Lessons in Market Design from the Chinese Imperial Civil Servants Match. Joint with Li Chen (Gothenburg)

Thursday 20 February 2020, 1.00PM to 2.00 pm

Speaker(s): Inacio Bo

Abstract: Many real-life random assignment problems rely on draws from urns in public settings: sports competitions, public housing, etc. These procedures are favored over alternatives due to its transparency and simplicity, which are often important characteristics for these solutions. In this paper, we describe one such mechanism, which was used for the assignment of civil servants from the late 16th century to early 20th century in China. Based on original documents and historical studies, we provide the first formal description of this procedure: candidates were assigned to jobs through a sequential lottery-based procedure, while at the same time preventing workers to be matched to jobs that were incompatible with them. We show that the procedure was inefficient, and document a change made in the 18th century that mitigates these inefficiencies. Based on what we determine to be the characteristics that were necessary for its success, generalize the procedure used in China to a wider family of assignment problems where workers may have different sets of compatible jobs, and describe how to arrange the sets of urns and workers, so that the resulting random assignment mechanism produces matchings that are always efficient and satisfy equal treatment of equals.

Location: Staff Room - A/EC202

Admission: Staff and PhD